GR 165428; (November, 2009) (Digest)
G.R. No. 165428 ; November 25, 2009
LAND BANK OF THE PHILIPPINES, Petitioner, vs. TERESITA PANLILIO LUCIANO, Respondent.
FACTS
Respondent Teresita Panlilio Luciano is the registered owner of two parcels of agricultural land in Tarlac, which she voluntarily offered for sale to the government under the Comprehensive Agrarian Reform Program (CARP). Petitioner Land Bank of the Philippines, tasked with determining land valuation, initially valued the properties at ₱425,626.67 using DAR Administrative Order (AO) No. 17, series of 1989. Respondent rejected this, and after a DARAB proceeding and a revaluation under DAR AO No. 6, series of 1992, the amount was adjusted to ₱643,662.54. Still dissatisfied, respondent filed a petition for eminent domain with the Special Agrarian Court (SAC) to determine just compensation.
The SAC, treating the case via summary judgment, fixed just compensation at a higher amount, utilizing a different formula and a palay price of ₱8.00 per kilo. The Court of Appeals affirmed this SAC decision. Petitioner Land Bank elevated the case to the Supreme Court, arguing that the SAC and the CA erred in computing just compensation without conducting a trial to receive evidence on the mandatory factors listed in Section 17 of Republic Act No. 6657 .
ISSUE
Whether the Special Agrarian Court and the Court of Appeals erred in determining just compensation without conducting a trial to receive evidence on the factors prescribed under Section 17 of R.A. No. 6657 .
RULING
Yes. The Supreme Court reversed the Court of Appeals’ decision and remanded the case for reception of evidence. The Court emphasized that the determination of just compensation is a judicial function. While the SAC has original and exclusive jurisdiction over such determinations, it is not bound by the formulas of administrative agencies and must exercise its discretion independently. Crucially, the Court held that the SAC must consider all the factors enumerated in Section 17 of R.A. No. 6657 , such as the cost of acquisition, current value of like properties, nature and actual use, and sworn valuation by the owner. These factors are mandatory, not merely advisory.
In this case, the SAC based its valuation on limited data from the Land Bank’s worksheet and its own assumptions, without conducting a full trial to receive evidence on the statutory factors. The respondent herself had limited the issue to the applicable capitalization rate in her pre-trial brief, but this did not absolve the court from its duty to establish a proper factual basis considering all legal criteria. The summary judgment was therefore improper, as the determination required a factual inquiry that could not be resolved solely on the pleadings. The case was remanded to the Court of Appeals to receive evidence and determine just compensation in accordance with Section 17 of R.A. No. 6657 and the applicable administrative orders.